Integrity Ideas are specific actions a leader can consider during the Re-Align step of Integriosity^®—actions that will begin to Re-Align the organization with Biblical beliefs, principles, and priorities.  You can find more Integrity Ideas at Integrous | Integrity Ideas (integriosity.com)

INTEGRITY IDEA: Pay Caesar

“Pay Caesar” is about faithful leaders resisting the business as usual temptation to reduce their organization’s tax obligations through arrangements that undermine the bigger WHYs of leading with faithful integrity through business a better way toward Biblical flourishing—Humanizing People, Beautifying the World, and Glorifying God.

It recognizes that, even if such complex arrangements are legal and would survive a challenge by taxing authorities, they may nevertheless undermine public trust if ordinary onlookers could reasonably view them as “dodging” or “avoiding” rather than “managing” or “minimizing.” It also recognizes that faithful leaders pursuing faithful integrity through the alignment of their organizational cultures and practices with Biblical beliefs, principles, and priorities are called to a higher standard than “Is it legal?”—a higher standard than “Can We?”

Integrity Ideas are practical actions toward implementing a bigger WHY for the organization.  Some are helpful ideas to consider as a faithful leader prayerfully discerns the best stewardship of the organization. Others may be important steps in the RENEW/RE-ALIGN/RE-IMAGINE/RESTORE process.

“Pay Caesar” is in the “necessary” category, because the pursuit of a business a better way “Should We” culture rather than a business as usual “Could We” culture is an important step in the pursuit of faithful integrity toward Biblical flourishing.

The Inspiration

This post was inspired by a recent New York Times article describing a Malta-based strategy used by Crocs and number of other organizations, with the assistance of major accounting firms, as “a trick for dodging taxes.”  Consider these excerpts from the article by Jesse Drucker and Dylan Freedman:

The accounting firms KPMG, PwC, Deloitte and EY are aggressively marketing the strategies that Crocs and other companies are using to push profits to Maltese units with ghost offices and no employees.

Accounting firms present the Maltese maneuvers as legal business transactions. But the lack of a business purpose beyond dodging taxes could make them vulnerable to legal challenges by the Internal Revenue Service.

After Malta said in 2023 that it would delay joining an international tax crackdown for six years, American companies including Victoria’s Secret, Kraft Heinz and PepsiCo flocked to the island, setting up hundreds of shell companies to exploit its near-zero tax rate.

In the scorching summer heat during a recent trip to Malta, a reporter for this article visited a building listed as the headquarters for the Malta units of a slew of U.S. companies. When buzzed inside, he found nothing but empty offices with the lights off. Wall-mounted nameplates announced the presence of dozens of companies claiming the remote building as their Malta headquarters, including Skechers, Microchip Technology and Thermo Fisher.

The purpose of this post is not to suggest that the tax arrangements involved are illegal or to shame or judge the companies or advisers involved.  Rather, it uses this real-life situation to illustrate the power of a business as usual culture to shape the hearts, minds, and behavior of humans made in the image of God.

With a business as usual focus on Profit as Purpose together with assumptions of Scarcity and Self-Interest and a “Can We” culture, it is not surprising that organizations would heed the advice marketed by major accounting firms to “dodge” taxes.  The NYT article says, “The arrangement reduced [Crocs’s] 2023 tax bill by $218.6 million.” The article characterizes the KPMG strategy even more pointedly as “hiding low-tax profits.” According to the article, Crocs used an intragroup loan structure to shift profits out of higher-tax countries where it actually sells shoes and into Malta.

Whether or not the complex arrangements are legal and would survive a challenge by taxing authorities, they may nevertheless undermine public trust in the organizations using them. A brief glance at just a few of the hundreds of reader comments to the NYT article provides some insight:

This makes me not want to buy Crocs. I’ll get something else next time.

When did it become cool for rich people and corporations to avoid taxes? This is everything that is wrong with our country. To allow American companies to avoid paying taxes is wrong plain and simple.

That 200 million Crocs doesn’t pay means everyone else pays it for them, less social services, infrastructure upkeep, of course hospitals, education, etc. Think about that when you buy pair of Crocs!! Time for boycotts.

So tired of these double dealing companies, want to do business in the US, and not offer anything back for it.

This is looting at it’s finest.

I echo the calls for a published list of the US companies that are using Malta or other countries to avoid paying their fair share. As a “normal” people, we have no option but to pay our taxes and contribute to our country’s needs. I’m so tired of corporate cheating and shirking.

To be clear, we are also not saying that organizations pursuing faithful integrity through business a better way must decline legitimate deductions, exemptions, or tax planning. In fact, to do so would likely be poor stewardship of the organization to the detriment of its stakeholders. From a purely legal perspective, the words written by Judge Learned Hand in a 1934 opinion for the U.S. Court of Appeals for the Second Circuit are often quoted:

Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.

But we believe faithful leaders pursuing faithful integrity are called to more than what is technically legal. As we urged in post #264 (Don’t Take the Bribery Bait), aligning an organization with Biblical beliefs, principles, and priorities calls for eschewing bribes, even if bribery becomes “legal,” is unlikely to be pursued as “illegal,” or is portrayed as “good for America.”

Biblical Tax Payment

Jesus famously addressed the payment of taxes to Caesar in a story that appears in three of the four Gospels.  To take one occurrence, in Matthew 22:15-22, the Pharisees try to trap Jesus on whether it’s lawful to pay tribute to Caesar.  He asks for a coin, asks whose image is on it, and when they answer “Caesar’s,” tells them: “Therefore render to Caesar the things that are Caesar’s.”

Supporting the idea of paying the government what is owed to the government, in Romans 13:1-7, Paul instructs:

Let every person be subject to the governing authorities. For there is no authority except from God, and those that exist have been instituted by God. Therefore whoever resists the authorities resists what God has appointed, and those who resist will incur judgment . . .. For because of this you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.

Paul does not present taxes merely as an unavoidable governmental exaction. He places paying them within the faithful obligation to give others what is properly owed to them.

It is helpful to recall the words of Justice Holmes, dissenting in a 1927 U.S. Supreme Court case, “Taxes are what we pay for civilized society.” This sentiment is reflected in some of the reader reactions to the NYT article. When an organization “dodges” paying what it genuinely owes toward the cost of civilized society, that burden is unfairly shifted to its neighbors—a shift inconsistent with the Golden Rule and the commandment to love your neighbor.

In an even more relevant story illustrating a Biblical standard higher than merely what is legally required, Jesus demonstrated a willingness to pay a tax for which he was technically exempt. The story is told in Matthew 17:24-27.  Peter was confronted with the question of whether Jesus must pay the temple tax. Jesus explains that he is technically exempt from a tax paid to God because he is the Son of God, but he directs Peter to pay the tax for both of them in order “not to give offense:”

And when he came into the house, Jesus spoke to him first, saying, “What do you think, Simon? From whom do kings of the earth take toll or tax? From their sons or from others?” And when he said, “From others,” Jesus said to him, “Then the sons are free. However, not to give offense to them, go to the sea and cast a hook and take the first fish that comes up, and when you open its mouth you will find a shekel. Take that and give it to them for me and for yourself.”

Jesus was invoking a higher standard than the “Can We?” of business as usual. Likewise, faithful leaders pursuing faithful integrity through the alignment of their organizational cultures and practices with Biblical beliefs, principles, and priorities are called to a higher standard than “Is it legal?”—a higher standard than “Can We?”

Hebrew scholar Dr. Skip Moen recently wrote about how the phrase “right and good” in Deuteronomy 6:18 invokes a higher standard than what the law requires: “And you shall do what is right and good in the sight of the Lord, that it may go well with you . . ..”

In rabbinic thought, “right and good” means “what the law requires (“right”) and what goes beyond the law’s requirement (“good”).”  In other words, if a person does what is right and good, he must first meet the requirements of the law and then extend compassion beyond what the law requires.  

A Higher Standard

When a business as usual organization applies only a “Can We?” standard when evaluating a “Malta-like” tax arrangement marketed by prominent tax advisers, it allows its WHY of Profit as Purpose to govern the decision. The strategy is defended, in effect, on the ground that the organization can legally reduce its taxes and increase its profit. The financial benefit to the organization and its owners is real.

The NYT article observes that Crocs’s shares had risen nearly 54 percent in 2026—more than four times the gain in the broader market—and describes its investors as “enjoying the upside.” The article does not suggest that the Malta arrangement caused the increase in Crocs’s share price, but the juxtaposition highlights the stakeholder tension. When profits are shifted away from the places where economic activity occurs, the organization and its owners retain the benefit of the tax savings, while countries that would otherwise receive tax revenue bear the consequences.

The pursuit of faithful integrity through business a better way toward Biblical flourishing recognizes owners as important stakeholders—but not the only stakeholders. The “Should We?” question is not whether the tax savings benefit the organization and its owners. They plainly do. The question is whether securing that benefit in this way is consistent with maximizing the flourishing of all the organization’s stakeholders and with its bigger WHYs of Humanizing People, Beautifying the World, and Glorifying God.

For a faithful leader, the pursuit of faithful integrity through business a better way toward Biblical flourishing requires asking whether an action contributes to or undermines the organization’s bigger WHYs of Humanizing People, Beautifying the World, and Glorifying God.  We believe Glorifying God requires cultivating a “Should We?” culture with integrity lines the organization will not cross in how it operates, no matter the cost.

As we explained in post #210 (Integrity Idea 040: Set Integrity Boundaries), Integrity lines go beyond legal lines and even the ethical lines often recognized by business as usual cultures. Rather than relying on standards set by the kingdom of the world, they are grounded in the Re-Imagined Purpose and Re-Imagined Values of the organization.

• God is not glorified when a business that purports to have a Re-Imagined Purpose and Re-Imagined Values aligned with Biblical beliefs, principles, and priorities, engages in tax arrangements that ordinary onlookers could reasonably view as “dodging” or “avoiding” rather than “managing” or “minimizing.”

• The world is not Beautified when an organization benefits from the infrastructure and institutions of civilized society while structuring its affairs to avoid contributing what it genuinely owes to sustain them.

• The employees of an organization are not Humanized—not drawn closer to a bigger vision—when they are called to implement such arrangements or when such behavior becomes public.

CONTINUUM: Practices

The Integriosity model organizes “heart change” along six Covert-Overt Continuums.  There is nothing inherently magic about these categories, but we believe they are helpful in thinking about practical execution of a Re-Imagined Purpose, Re-Imagined Values, and a Re-Imagined Culture.  The Continuums are Prayer, Proclamation, Policies, Practices, Products, People.

Each Continuum represents an area in which leaders can begin to think about, plan, and institute Re-Alignment changes to the heart of the organization.

“Pay Caesar” is on the Practices Continuum. It involves practices the organization can adopt to reflect its culture while also helping to shape and reinforce that culture. 

COVERT-OVERT RATING: Highly Covert

The Integriosity model breaks the Covert-Overt Continuums into six gradations—from Highly Covert to Highly Overt—that we believe are helpful in beginning to pray and think about what is most appropriate for an organization at a particular moment in time.

Most Integrity Ideas have one place on the scale.  Some can vary depending on how they are implemented.  We identify “Pay Caesar” as Highly Covert (an action that would be taken by a secular company), because choosing not to pursue an aggressive tax arrangement does not itself reveal a Biblical motivation. Secular organizations may make the same choice because tax arrangements that ordinary onlookers reasonably view as “dodging” or “avoiding” can undermine public trust and damage the underlying business.

It can be moved toward the Overt end of the Continuum by, for example, explaining the Biblical basis for electing not to shift a tax burden to “neighbors” by attempting to avoid taxes genuinely owed within the spirit of the tax laws.

STAKEHOLDERS SERVED: Community, Kingdom

When we categorize faith-based actions, we also consider the stakeholders principally impacted by the action: Employees, Customers/Clients, Owners, Suppliers/Vendors, Community, and Kingdom.

“Pay Caesar” principally serves the community by the organization paying what it genuinely owes toward the cost of a “civilized society.” The Kingdom benefits when an organization puts Humanizing People, Beautifying the World, and Glorifying God above Profit as Purpose.

IMPLEMENTATION

Implementing is both straightforward and complicated.  It is as straightforward as “pay your taxes,” but it is complicated by the legitimate need to steward well by utilizing legitimate deductions and exemptions and engaging in prudent tax planning and strategy. Discernment can be difficult when distinguishing between minimizing taxes consistent with a bigger WHY of Glorifying God and tax arrangements that undermine that WHY. It is in the gray areas that trouble can occur.

In a follow-up to a 2019 virtual talk to a group of business school undergraduates, Andrew Fastow of Enron fame (or, more accurately, infamy) reflected on the gray area problem:

Most schools teach ethics like it’s black and white. They say being ethical is to follow the rules, and being unethical is to not follow the rules. But there’s a gray area, where the rules may allow you to do something, but it may not be the right thing to do. . . You need to understand the difference between the right thing to do and the thing you have a right to do. 

[W]hen people make decisions in the gray area, they tend to underestimate the risk. . . When you’re in the situation yourself, it often starts with small, seemingly innocent decisions. But all of a sudden you find yourself down a path that you can’t come back from.

After leaving prison, Fastow reportedly said:

We weren’t thinking that it was fraud, but I also knew it was intentionally misleading, like a weird dichotomy. I rationalized it by saying, “This is how the game is played” . . ..

We believe the most effective approach is to ensure that the organization has set a values “plumb line,” established integrity boundaries, and is cultivating a “Should We?” rather than a “Can We?” culture. These steps have been the subject of dedicated posts.

Post #145 – Integrity Idea 013: Set a Values “Plumb-Line”

Post #210 – Integrity Idea 040: Set Integrity Boundaries

Post #281 – Stay Off the Slippery “Can We” Slope

Setting a values “plumb line” is Re-Imagining and communicating values that reflect and support the organization’s bigger WHY.  Values in an organization are critical because they serve to translate the bigger WHY into an aligned culture—they are the plumb line that keeps the organization’s culture in line with its purpose.  Values proclaim to the world (including employees) “this is who we are” and proclaim to employees “this is how we do things around here.”  Values proclaim the organization’s HEART in ways that help people make decisions about actions and behavior.

Setting integrity boundaries the organization will not cross in how it operates, no matter the cost, recognizes that people are more likely to stay behind a line if they know it is there before they are standing on it. It requires intentionality and trust in God.

“Should We” can call people to a standard higher than merely man-made laws or current societal ethics—it can call them to the Biblical standards that they were created to emulate, and it can call them to the organization’s values. In a “Should We” culture, people ask things like:

“Is it consistent with how we want to serve our stakeholders?”

“Is it consistent with our values?”

“Is it consistent with our intentional culture?”

“Is it doing the right thing, in the right way, for the right reasons?”

“Is it consistent with what we say we stand for and who we say we are?”

Regardless of what faithful goal or faithful guardrails are posted or otherwise reflected on an organization’s website or in its stated purpose or stated values, employees will experience, and respond to, what they perceive to be the real purpose and real values. Crocs provides an interesting example. The Crocs Code of Ethics contains just the type of “Should We?” questions you might hope for in a secular organization:

We realize that no set of policies or guidelines can cover every possible challenge we may encounter. I encourage you to keep these questions in mind when confronted with business decisions that have ethical repercussions:

Is it legal? And does it comply with the values set forth in the Code?

What if my actions were reported on the front page of the newspaper?

What would my family, friends, or neighbors say about my actions?

Will there be any negative consequences for the Company?

It makes one wonder—were those questions embedded in the Crocs’s culture as important value plumb lines and integrity boundaries, or did they merely exist in the 20-page Code of Ethics? In hindsight, the actions were unflatteringly exposed in a major newspaper, and we know what some NYT readers said in response. Negative consequences could certainly come from lost customers and the attention of tax authorities.

While we have been focused on Crocs, it is important to note that it was likely the business as usual priority of Profit as Purpose and its “Can We?” culture that led the world’s top accounting firms to “aggressively” market the Malta arrangements to their clients. The lesson applies equally to professional advisers. They do not escape responsibility merely because a client is willing to implement a strategy. Their own purpose, values, and culture should determine not only whether they “can” design and market an arrangement, but whether they “should.”

At the end of the day, “Pay Caesar” is less about taxes and more about ensuring that an organization pursuing faithful integrity through business a better way toward Biblical flourishing has in place a Re-Imagined Vision, Re-Imagined Values, and a Re-Imagined Culture that lead people to do the right thing, in the right way, for the right reasons.

PERSONAL NOTE (from PM): When I was planning this post, two practical guidelines came to mind: “Would you want your tax arrangements to appear on the front page of tomorrow’s paper?” and “What would your customers and employees say if they knew about the tax arrangements?”  Then, I found Crocs’s Code of Ethics, and to my surprise . . .

ESSENCE:  Integrity Ideas are specific practical actions a faithful leader can consider in leading faithfully through business a better way.

INTEGRITY IDEA: Pay Caesar

“Pay Caesar” is about faithful leaders resisting the business as usual temptation to reduce their organization’s tax obligations through arrangements that undermine the bigger WHYs of leading with faithful integrity through business a better way toward Biblical flourishing—Humanizing People, Beautifying the World, and Glorifying God. A recent New York Times article described a Malta-based strategy used by a number of organizations, with the assistance of major accounting firms, as “a trick for dodging taxes.” The purpose of this post is not to suggest that the tax arrangements involved are illegal or to shame or judge the companies or advisers involved.  Rather, it uses this real-life situation to illustrate the power of a business as usual culture to shape the hearts, minds, and behavior of humans made in the image of God. It recognizes that, even if such complex arrangements are legal and would survive a challenge by taxing authorities, they may nevertheless undermine public trust if ordinary onlookers could reasonably view them as “dodging” or “avoiding” rather than “managing” or “minimizing.” Jesus famously addressed the payment of taxes to Caesar by calling on his followers to “render to Caesar the things that are Caesar’s” and separately demonstrated a willingness to pay the temple tax—even though, as the Son of God, he was exempt—“not to give offense.” “Pay Caesar” also recognizes that faithful leaders pursuing faithful integrity through the alignment of their organizational cultures and practices with Biblical beliefs, principles, and priorities are called to a higher standard than “Is it legal?”—a higher standard than “Can We?”  The pursuit of faithful integrity through business a better way toward Biblical flourishing requires asking whether an action contributes to or undermines the organization’s bigger WHYs. It requires cultivating a “Should We” culture with values “plumb lines” and integrity boundaries.  Rather than relying on standards set by the kingdom of the world, they are grounded in the Re-Imagined Purpose and Re-Imagined Values of the organization. 

COVERT-OVERT CONTINUUM (six Continuums for action): Practices

COVERT-OVERT RATING (several levels from Highly Covert to Highly Overt): Highly Covert

STAKEHOLDERS SERVED: Community, Kingdom

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Photo credit: Original image by The New York Public Library on Unsplash
(photo cropped)